That’s according to Michael Feroli of J.P. Morgan, who has crunched some numbers. Yes, the Internal Revenue Service is unlikely to order tax withholding rules to be changed on January 1 to the pre-Bush-tax-cut levels if a deal to avert the cliff still hasn’t been reached.

But there’s a limit to what the government can order. It’s not likely Social Security withholding rates would be extended, he says, nor would rates for upper-end taxpayers be kept at the 2012 level. Furthermore, Feroli points out, there’s no leeway for the Treasury Secretary to unilaterally extend expiring unemployment benefits.

So what would happen? Real disposable personal income would contract at around a 4% annualized rate. “In this sense, talk of a ‘fiscal slope’ is somewhat absurd, as there is an abrupt downshift in income early next year,” said Feroli.

That said, Feroli is still anticipating a deal will be reached. “We continue to believe a deal gets done before year-end, though there is some small risk of a ‘bungee-jump’ or ‘boomerang’ scenario, whereby we temporarily go off the cliff,” he told clients.